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Charting The Unquenchable Investor Thirst For Kool-Aid

Tyler Durden's picture




 

Thanks to the "pulling forward" of future production in the channel-stuffing-based inventory build of Q3, consensus estimates for the growth of the US GDP in Q4 2013 has collapsed to new lows for this cycle at a mere 1.5%. However, the "escape-velocity" recovery remains just around the corner as estimates for Q1 and Q2 2014 remain unimpacted by such nuance as reality...

 

Consensus GDP hits new lows for Q4 2013 - but 2014 will be just fine...

 

...just like 2013 was supposed to be in 2012...AND 2011... AND 2010...

Chart: Bloomberg and Deutsche Bank

 

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Thu, 12/12/2013 - 21:43 | 4241883 666
666's picture

Any minute now...

Thu, 12/12/2013 - 21:44 | 4241884 LetThemEatRand
LetThemEatRand's picture

If at first you don't succeed....

Thu, 12/12/2013 - 22:37 | 4242049 hairball48
hairball48's picture

"If at first you don't succeed...."

Then maybe you just suck

I bought that T-shirt from a sponsor here :) :)

Thu, 12/12/2013 - 21:48 | 4241886 michael_engineer
michael_engineer's picture

I've always thought nonsense of the pulling forward future production mindset.  The world runs on real stuff.  It's not so much a pulling forward, but just being organized enough to do the pulling out of the fields, and the mines and out of the ground.  If it wasn't loans/debt involved in financing, it could be some other model that provides collaboration and shared effort.

Thu, 12/12/2013 - 22:00 | 4241926 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Pulling forward future production is unsold produdtion no matter how you spin it.  It's debt till you sell it, if you sell it.

Thu, 12/12/2013 - 23:09 | 4242160 disabledvet
disabledvet's picture

there's no election so you can't blame the politicians. interestingly "they surprised the markets by agreeing to a budget." that sounds to me like the last gasp of an inflation trader/spread widening trade since the default setting to a non agreement would be for the Fed to taper. that leaves only energy and the seasonality trade as the last price to collapse (it's cold...freeze the Northerners.) Of course why would XOM suddenly call for an export of oil as legal (which they just demanded) if they were worried about prices soaring? it's not like oil is cheap or recovery is "gangbusters." where is that XOM battery powered car again?

Thu, 12/12/2013 - 21:48 | 4241891 FieldingMellish
FieldingMellish's picture

I'm sure that new methods can be employed to ensure that GDP will only ever rise from here on out.

Thu, 12/12/2013 - 21:50 | 4241899 mayhem_korner
mayhem_korner's picture

 

 

GDP estimate tapering.

Thu, 12/12/2013 - 21:52 | 4241901 LetThemEatRand
LetThemEatRand's picture

The only thing that will taper.  Well, that and the middle class.

Thu, 12/12/2013 - 21:51 | 4241909 Cognitive Dissonance
Cognitive Dissonance's picture

The grass is always greener on the other side of moar QE.

Thu, 12/12/2013 - 21:51 | 4241910 Quaderratic Probing
Quaderratic Probing's picture

Generous Data Propaganda

Thu, 12/12/2013 - 22:00 | 4241923 Dr. Engali
Dr. Engali's picture

Just imagine how bad it could have been.....,,

Thu, 12/12/2013 - 23:12 | 4242171 disabledvet
disabledvet's picture

my imagination has now moved to "it's bad for those people over there."

Thu, 12/12/2013 - 22:20 | 4241966 GeoffreyT
GeoffreyT's picture

The persistent 'highballing' of forecasts by the sell side is such an old horse that I read about it as an undergraduate - e.g., The Forecast Accuracy of Individual Analysts: Evidence of Systematic Optimism and Pessimism by Butler & Lang in the Journal of Accounting Research Vol. 29, No. 1 (Spring, 1991), pp. 150-156.

It's not by accident, either. I wrote a piece back in 2001 (when News Corpse was still listed on the ASX) pointing out precisely the same 'parallel lies' in forward estimates of NCP's EPS (and I noted that analysts had no justification for estimating non-zero EPS growth for the Corpse, since its earnings had been static for eight years at that time).

Sadly the piece (entitled "Parallel Lies") is not online, as it belongs to an entity that was acquired by a major bank in 2006... and then shuttered.

Anyhow -

For individual stocks, it's obviously because of the pressure on equity analysts from the IB arms of their firms: as the Carly Fiorina incident made clear all those years ago.

(For those who don't remember: Fiorina had some burning desire to fuck up two companies at once, but HWP wasn't that keen to be acquired. Quite a few big-firm analysts couldn't see any merit in the merger. Fiorina dangled the idea that any 'circumspection' by analysts about the CPQ/HWP merger ran the risk their firm not being considered for future IB work. She did that on a conference call with Deutsche Bank... and it was recorded as was required under RegFD.)

 

You have to bear in mind that analysts are NRG (non-revenue generating) - the only revenue they may generate is indirect (through ticket clippings that result from buys/sells based on their recs).

 

It takes a fucking truckload of ticket clippings to come close to matching the cheque from a single large IB transaction... adn ticket clippings have overhead, whereas IB work requires a shitty spreadsheet copied from the internet, five $1000-an-hour prozzies and 2 kilos of coke.

So from the firm's point of view, analysts are encouraged not to bite the hand that signs the IB cheques.

inb4 anyone mentions bullshit about Chinese Walls: as I wrote in 2000, they ought to be called "Japanese Walls" because they're basically a flimsy framework with some paper over them.

Thu, 12/12/2013 - 23:16 | 4242180 LetThemEatRand
LetThemEatRand's picture

So those analysts are really behind the old 8-ball, I guess.   

Fri, 12/13/2013 - 10:08 | 4243099 d edwards
d edwards's picture

Actually, it seems they are using a "Magic 8 Ball" to make their decisions on the economy. :-D

Thu, 12/12/2013 - 23:47 | 4242275 starman
starman's picture

Fucking shit circus! With buncha ass clown! And a bushman for head clown!

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